Water costs to slow down

RAPIDLY rising water costs in Gippsland are set to slow down according to Gippsland Water's final 'Water Plan 3' proposal which was released yesterday.

Tariff increases are set to drop to 0.98 per cent annually plus inflation for the 2013-14 to 2017-18 period as part of the proposal, down from a total increase of almost 98 per cent over the past five years.

The region's residents are among the highest paying water users in the state and Gippsland Water managing director David Mawer said the new scheme was designed to absorb as much of its clients' financial pressures as possible.

"This is the best balance we can have between running a long term sustainable organisation that the public require of us and being mindful of what it costs to do that," he said.

"The biggest thing is we've listened to our customers and they've indicated concerns over utility prices and we agree with that.

"I think the biggest single difference in this is much more modest pricing for the five-year period."

Originally the draft outlined two options for price increases: a 1.32 per cent rise per annum plus inflation or an "up front" increase of 3.94 per cent plus inflation followed by four annual increases of inflation alone.

The final version of the proposal favoured the former option with a reduced rate following an extensive community consultation period.

For full service customers the projected average annual household bill will rise from $1257 in 2012-13 to $1320 by 2017-18, excluding inflation, representing a dramatic reduction in rate increases.

This follows a Gippsland Resources Group survey which found a third of water users considered prices "unacceptably expensive" earlier this year.

Gippsland Water recognised the impact of rising utility costs on low income earners in the proposal and has targeted operational efficiences as a primary means of reducing tariff increases.

Anglicare Gippsland community services program manager Bruce Thorne said any reduction in utility costs would be well received by those currently struggling with bills.

"In the midst of other rises in costs of living, particularly gas and electricity, a modest increase for water would be very welcomed," Mr Thorne said.

"Obviously any increase is still going to add to pressure but we'd be very welcoming of the modesty of Gippsland Water's increases."

One of the concerns raised in the consultation process was the management of capital expenditure items in the new plan in light of the construction costs of the Gippsland Water Factory, which were widely blamed for previous tariff rises.

"The reality is you face a capital cost up front but over a long time those things are amortised into the business," Mr Mawer said.

"Over time that (the GWF) will prove to be an extremely worthwhile asset and people need to remember it also is a major waste water domestic treatment plan.

"We have spare growth capacity going forward so rather than having to build and replace other waste water treatment plants we've built a big one in the middle."

Mr Mawes said past pricing increases had also allowed the business to become more resilient and capable of dealing with extenuating circumstances, such as the recent weather damage throughout Gippsland.

"Our systems were sorely tested and the public barely would have noticed any change in our service through that yet we had people working around the clock," he said.

"Our systems and our hardware has been built to manage more variation than it has been able to in the past."

The plan will now be reviewed by the Essential Services Commission which will release a draft decision in February 2013 and consult directly with the community.

The ESC will release a final decision in May 2013 to be implemented from July 2013.

Mr Mawer said circumstances would have to be extreme for any changes to be made to the plan post implementation.

The final proposal can be viewed at www.gippswater.com.au

Anglicare advises people struggling with utility bills to seek support from financial counsellors or the Energy and Water ombudsman of Victoria.

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